Compex Intern. Co., Ltd. v. Taylor

209 S.W.3d 462, 2006 WL 2986991
CourtKentucky Supreme Court
DecidedJanuary 25, 2007
Docket2005-SC-0228-DG
StatusPublished
Cited by31 cases

This text of 209 S.W.3d 462 (Compex Intern. Co., Ltd. v. Taylor) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Compex Intern. Co., Ltd. v. Taylor, 209 S.W.3d 462, 2006 WL 2986991 (Ky. 2007).

Opinions

ROACH, Justice.

I. INTRODUCTION

This case involves a products liability claim for the alleged breach of an implied warranty of merchantability. The Bell Circuit Court granted a motion to dismiss the implied warranty claim against Appellant, Compex International Company, Ltd., after concluding that the parties lacked privity of contract. That portion of the circuit court’s judgment was reversed by the Court of Appeals, which held that the implied warranty claim was permissible under KRS 355.2-318, a statute in Kentucky’s version of the Uniform Commercial Code (U.C.C.) which extends liability under an implied warranty to the family members and household guests of a product’s buyers. Appellees, Stephen and Laura Taylor, contend that the Court of Appeals was correct to remand the case and argue that their implied warranty claim against Compex is viable, despite a lack of contractual privity. We disagree and reverse the decision of the Court of Appeals.

II. BACKGROUND

The basic facts underlying this case are not in dispute and are set forth as described in Appellees’ Complaint. Appel-lees, Stephen and Laura Taylor, visited the home of Stephen’s parents in Bell County on or about July 14, 2001. During the [463]*463visit, Stephen was injured when the chair he was sitting in collapsed, causing him to fall to the ground. The chair, which his parents had purchased at a K-Mart store in Middlesboro, had been manufactured by Compex.

Appellees filed a products liability action in the Bell Circuit Court naming Compex and K-Mart Corporation as defendants and claiming damages under theories of negligence, strict liability, breach of implied warranty, and loss of consortium.1 The parties entered an Agreed Order, dismissing without prejudice Appellees’ claims against K-Mart due to the company’s pending bankruptcy. Compex filed its Answer to the lawsuit, asserting that some or all of Appellees’ claims were time-barred and that the warranty claim, in particular, could not be maintained due to a lack of privity. In December 2003, Com-pex filed a motion to dismiss Appellees’ claims, asserting that Appellees’ claims for negligence, strict liability, and loss of consortium were barred by the applicable statute of limitations. It is further argued that the warranty cause of action failed to state a claim upon which relief could be granted because Appellees lacked privity of contract with Compex and were not otherwise entitled to bring such a claim under Kentucky’s version of the U.C.C. Appellees’ claims were dismissed as time-barred by an order of the trial court on December 24, 2003. In an Amended Order, the trial court specified that Appel-lees’ warranty claim had been dismissed due to the court’s determination that the parties lacked privity.

In an unpublished opinion, the Court of Appeals affirmed the trial court’s dismissal of the negligence, strict liability, and loss of consortium claims as time-barred, but reversed the dismissal of Appellees’ implied warranty claim. The court reasoned that despite the parties’ lack of privity, Appellees’ warranty claim was valid pursuant to KRS 355.2-318, a provision of the UCC which provides an exception to the privity requirement for warranty liability to the family members and household guests of a buyer of goods. This Court granted the company’s motion for discretionary review to consider the Court of Appeals’ treatment of Appellees’ warranty claims.

III. ANALYSIS

The sole issue presented in this case is whether Appellees’ implied warranty claim was properly dismissed by the trial court.2 Appellees offer two central arguments in support of their position that the claim was dismissed improperly. First, they claim that under Kentucky law privity of contract is not a prerequisite for an action to recover damages due to the breach of an implied warranty, an argument that was [464]*464rejected by the Court of Appeals. Alternatively, they argue that their implied warranty claim should not have been dismissed because it falls within the exception to the privity requirement defined in KRS 355.2-318. Neither of these arguments is convincing.

In support of their first claim, Appel-lees rely solely on Griffin Industries, Inc. v. Jones, 975 S.W.2d 100 (Ky.1998), which stated that “privity is not a prerequisite to the maintenance of an action for breach of an implied warranty in products liability actions.” Id. at 102 (citing Dealers Transport Co. v. Battery Distributing Co., 402 S.W.2d 441 (Ky.1965)).3 But this statement in Griffin mischaracterized the holding in Dealers. While there is no question that the Dealers Court openly entertained the idea of disposing of privity as a prerequisite for products liability actions involving breach of warranty, the Court ultimately declined to endorse that view, deciding that the concept of strict liability, as defined in Section 402A of the Restatement (Second) of Torts, was the better approach.4

Moreover, this Court confirmed the limits of the Dealers opinion in Williams v. Fulmer, 695 S.W.2d 411, 413 (Ky.1985) (“The opinion of our Court in Dealers Transport Co., supra, adopted the theory of strict liability in tort as set out in Section 402A of the Restatement (Second) of Torts. This states a cause of action for physical harm (to person or property) caused by a product defect against the manufacturer or commercial seller of a product, not to be confused with the cause of action for breach of warranty against a commercial seller as set out in the U.C.C.”). Justice Leibson, who wrote the opinion for a six-vote majority (Justice Vance concurred in result only), left no doubt that privity remains a prerequisite for products liability claims based on warranty, concluding forcefully: “We have no precedent for abolishing privity where liability is based on the sales contract.” Id. at 414. As such, Appellees’ reliance on Griffin is misplaced.

Of course, our recognition of the privity requirement is only the first step in this case. As the Court acknowledged in Williams, “If liability is based on sale of the product, it can be extended beyond those persons in privity of contract only by some provision of the U.C.C. as adopted in Kentucky. The only provision of the U.C.C. extending breach of warranty in injury cases is KRS 355.2-318.... ” 695 S.W.2d at 413. The Court of Appeals held, and Appellees now argue, that the warranty claim in this case should have been allowed to proceed pursuant to KRS 355.2-318, but such an approach would effectively ignore the privity requirement for claims of this type. The statute reads as follows:

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Bluebook (online)
209 S.W.3d 462, 2006 WL 2986991, Counsel Stack Legal Research, https://law.counselstack.com/opinion/compex-intern-co-ltd-v-taylor-ky-2007.